Corporate Social Responsibility has become a major practice in the many businesses around the world. However, in terms of its approach to finance, it is a truly sad story that most finance managers have a perception CSR as simply a cost center. Meaning, the calculator of its CSR program rather than also become a contributor.
Most CFO’s don’t have a CSR mindset. So what is exactly the deal in embedding CSR to a company’s financial division. So let us share to you a story:
There once was an executive attending a leadership training seminar for his company. In the training program, there was an exercise on how to reduce cost. So the finance guy created in his report avoiding the 60 redundancies the company made. Thus, 60 people will become unemployed to solve their company’s cost problem. At times, when you are left alone on the working table, 60 people losing their jobs would make you feel uncomfortable.
Why? Because finance managers are also employees. They share responsibility to be a driving factor of the corporate CSR approach. Employees create their share of direct impact through their resources, travel as well as other expenditures incurred. Moreover, the finance manager or CFO’s are the first to understand the financial implications of the company, so by not just being a calculator, the finance has a huge role in a company’s CSR program.
Accordingly, in one of the research performed by the Chartered Institute of Management Accountants and Institute of Business Ethics. They issued on 2008 emphasizing the role that ethics will increasingly play of finance manager’s job. In the report, it shows several ways on how they can contribute to the company’s CSR. Here are those:
- It is the finance’s division role on how accounting and finance functions improve CSR Strategy. They can constantly check for carbon trading, ethical checks and balances and expectations of ethical investors.
- It is also the role of finance division to measure non-financial information as this will be integral in business decision making. Say for instance quantifying expectations from consumers as well as working hand in hand with the human resources to quantify the expectations of employees; and
- By making sure every accounting and finance system is working. Say for instance, paying dues on-time is a CSR strategy that would help put up a good reputation in the industry and among marketers of the business.
Whether you like it or not finance managers need to embrace CSR as a reality in business. He needs to be make it a habit so later on, it will become a company culture.